Before applying for a bad credit car loan consumers can opt for a credit monitoring service or set up one of their own.
Our job
At AutoNet Financial we are in the business of helping our customers reestablish their credit by financing either a new or a newer pre-owned vehicle with a bad credit auto loan. But in addition to using a bad credit auto loan to raise your credit score, there are a number of other things that you can do to ensure that your FICO score rises.
TransUnion TrueCredit division’s vice president of consumer education had this to say about financial management: ” While it can be overwhelming, now more than ever, consumers need to play a more active role in their financial management to ensure they are in the best possible position with lenders.”
With that in mind, here are two ways that credit-challenged consumers can go about monitoring their credit:
Credit monitoring 101
Monitoring service
A number of independent services, such as freecreditreports360.com, will, for a fee, allow you to monitor all three of the credit bureaus (freecreditreports360.com merges the information from the three bureaus onto one report) at the same time as well as view your three FICO scores from each bureau. The three major credit bureaus, TransUnion, Experian, and Equifax, also offer this service.
Programs that monitor a single bureau usually start around $6.95 a month while it will cost you at least $12.95 to monitor all three. Other options include such extras as score monitoring, reports that contain scores, score watch, score power and credit watch. With Equifax, you can even “protect” an entire family of four for $344 per year.
As you can see, these services don’t come cheaply. There is, however, another strategy that you can employ before you apply for a bad credit car loan that is recommended by a number of consumer groups and it takes advantage of a law enacted seven years ago.
The FACT and your own credit monitoring service
The Fair and Accurate Credit Transactions Act (FACT Act) was signed into law in December 2003. It allows consumers to get one free credit report from each of the three bureaus once every 12 months. This is in addition to laws that allow you to receive free reports if you are denied credit, discover there are errors in your report or if you suspect identity theft.
By staggering these free reports throughout the year, you can essentially monitor your credit (albeit one bureau at a time) at no cost. As an example, you could order the first report in January from one bureau, the second report in May from another bureau and the third in September from the last bureau. And just like that, you’ve created your own credit monitoring service. If you find any mistakes, the government provides for even more free services and here’s where it gets interesting:
If you find any errors from any one bureau, such as an account that isn’t yours, you can immediately order reports from the other two credit agencies under the ID theft free report system. Finally, as if that isn’t enough, you can, as we previously stated, also order a credit report – at any time and from any of the three bureaus - if you are denied credit, even for a bad credit car loan, based on the information that they contain.
As we see it
If you don’t have the time or feel that the services offered by the credit bureaus are worth the cost, then by all means sign up for one on the dotted line. But with a little time and not much effort, you can set up your own “credit monitoring service” and save yourself at least $100 per year.
For more information on the bad credit auto loan process, please visit our web site at www.autonetfinancial.com.
